We are looking at other low-cost offerings under Tata Swach

The fact that almost 90% of urban India and 99% of rural India do not use any sort of purifier presents a huge market
opportunity for players in the water purifier segment. While a section of the urban consumers has taken to premium water purifiers in a big way, the advent of cheaper products has significantly changed the market dynamics. Sabaleel Nandy, head - water purifier business, Tata Chemicals, tells Shailaja Sharma and Nupur Anand about the products in the pipeline and how the company squares up to meet future requirements of the market.
Edited excerpts.

What are your observations of the water purifier market since the Swach launch two years ago?
Penetration of water purifiers has been largely urban centric. According to industry data, 90% of urban India still does not use any sort of purifier and the corresponding number for rural areas stands at 99%. The reason for this is not hard to imagine. The UV-based or RO purifiers selling at Rs8,000 and above can’t be afforded by many.

The barrier to mass adoption was pricing until 2005-06 when Hindustan Unilever (HUL) came out with Pureit. And more number of people felt it was accessible. It also did a huge awareness generation campaign. We were fortunate to have someone like Unilever before us because it made our job easier. When we came in at a price of Rs750, which was bang on the price of a candle filter, nobody doubted us. There were fears that we would be pushed in the filter space and competition would make us appear as an inferior product. When we launched our product in 2010, we broke the price barrier from Rs2,000 to Rs750.

The non-electric segment is also facing stiff competition…
The more intense the competition, the merrier. The biggest challenge we face is awareness generation. And no single player can generate awareness single-handedly. When reputed players are around for the long haul, it helps in market development...
We will increase ad spends to make sure the product awareness barriers are broken and people know about pitfalls of using unpurified water and about the brand Tata Swach.

Unlike in other categories, in this space, we (companies) should look at each other as allies and not competitors. Because it has a strong social motive, it places a lot of responsibility on players.
But Swach has been in several legal battles with HUL’s Pureit…
All of them have been resolved thankfully, and all of them in our favour. All the cases till date have been in our favour, we have been completely vindicated in our stand. If you see, in terms of our technology and patent, the order has been in our favour.

What about launching more products at lower price points or the premium end?
I don’t think there is an end to the pursuit of making the product cheaper. The work is on. We believe any player which is here for long has to look at convenience, affordability and aspiration of the product in a big way. We have just launched the product two years ago, so we are setting up the distribution network, in parallel we are looking at other low-cost offerings and boosting our portfolio. We are fixed in being the lowest cost. We are at Rs900 (from the previous Rs750) and Rs1,199.

We are still at the top of the bottom of the pyramid. There are a lot of start-ups and we keep getting collaboration interests. Our own scientists are working. This category will be one of the very closely watched categories and consumers will benefit the most as a result.

Does it take longer to break even per unit in this business?
Yes, it is a business where we have a commercial motive for sure, but we are not in a hurry to make money. Being in the long run, it is our endeavour to price our product affordably. It will take a longer time to break even.

There are not huge margins to be made, it is completely a volumes game. The industry plants a seed through the sale of a purifier and then repeat sales come through sale of bulbs over the years. One has to be patient enough for the seed to grow into a plant.